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Looking at inputs for 2014

Last year’s drought led to record-high farm incomes in 2012.  But, with drought relief in some of the major corn and soybean producing states, and higher anticipated yields – Purdue Extension agricultural economist Alan Miller says it will be a different story this year.

In fact he anticipates lower grain prices and says that could lead to a shift in demand and prices of inputs for 2014.  “We’ve already seen a pretty significant decline in our fertilizer prices,” he says.  “We’re expecting fuel to be down and overall we’re expecting to see a lower cost of production for corn and soybeans next year.”

Miller says because the markets are constantly changing and that could have a large impact on input prices.  In fact, he says in recent years farmers were concerned about getting their prices locked in for the next year.

This year, that is not the case.  “In a market like we have currently for fertilizer, prices are in decline and there is a worldwide glut of them,” he says.  “We also have production capacity that has increased faster than demand.”

Which, he says, allows farmers to take more of a “wait and see” approach to booking inputs for next year.